Essays on the Effects of Macroprudential Policy: Evidence from India

This thesis addresses three research objectives related to macroprudential policy (MaPP) in India. The first objective is to assess the effectiveness of MaPP in India. The second objective is to evaluate the effects of MaPP on macroeconomic variables. The final objective is to focus on the impact of MaPP on the banking sector. The findings indicate that tightening MaPP significantly reduces the intermediate variables of systemic risk. MaPP has a positive impact on output and consumption, but does not have any impact on inflation. From a banking perspective, it reduces the risk-taking behavior of banks while maintaining the stability of the banks.